Last month, the Caledonia Mining Corporation (AIM, CMCL) announced it had appointed Voltalia (EPA: VLTSA) as the project contractor last month, after announcing it was about to raise funds to invest in the construction of the solar power plant.
The purpose of this project is for Caledonian Mining to have a solar power plant to power the Zimbabwe blanket mine project. Caledonia, agreeing to the initial design stage of the project, said that once an engineering, procurement and construction (EPC) contract is created, Voltalia will begin procurement and construction.
Currently, the ordered commissioning of the 12MW solar power plant is expected to take place in the final quarter of 2021. Once completed, the plant is expected to provide approximately 27% of the mine’s electricity demand.
Contractor Voltalia is a Paris-listed renewable energy provider with “significant” experience in developing, building, operating and maintaining solar plants. The company already operates in Burundi, Malawi and South Africa.
Speaking about solar fundraising and shareholder considerations, the Caledonian Mining Statement read:
“As previously announced, Caledonia has raised the necessary funds to build the factory through the NYSE American market sales process carried out by Canter Fitzgerald & Co. Following this process, the company has issued 597,963 shares, representing significantly less issuance shares than the expected 800,000 initially applied to the list.”
“This project is primarily intended to protect blanket mines from further deterioration in power supply situations. Therefore, although this project is largely carried out for defensive reasons, it is expected to provide small benefits to shareholders after taking into account the diluted effects of equity issued to fund it.”
Following seemingly positive news, Caledonia Mining stocks fell at 2.88% or 40.00p, with 1,350.00pa share 07/10/20 11:06 BST. This is P since the beginning of the year, but its share of 1,890pa is below the highest since the start of the year.
The company currently has a dividend yield of 1.60% and an AP/E ratio of 4.69, below the average 34.14 for the base materials sector.
